Sources of Financing and Policy Recommendations on Boosting e-Health Investment

A major study on financing e-Health was commissioned by DG INFSO
and Media’s ICT for Health Unit. Its objective: to examine the financial needs
of e-Health investment against the funding available and therefore assist EU
Members and the Commission in their efforts to meet the e-Health Action Plan
objective of “supporting and boosting investment in eHealth.”

The main conclusion to be drawn from the study is that increasing
finance for healthcare may not increase investment. The question is not how
much to spend but what to spend the money on. The main priority should be
expanding e-Health skills and knowledge; the e-Health capabilities of both
healthcare staff and ICT supplier’s staff must increase. This increase in
capability will in turn enhance success and therefore boost investment. More
capable staff increases the potential value of e-Health and the confidence of
investors in the field.

The two main shortfalls concerning the resources for e-Health are
defined as:

Ó Significant lack of skills and capabilities in the
workforce to deal with all e-Health requirements

Ó Limited view of the potential of e-Health by many
health care professionals, executives and managers, leading to narrowly defined
e-Health investment plans.

Specific financing opportunities to try and fix these shortfalls
are required. Something must be done to shorten the knowledge gap concerning
the concept of e-Health. A clear definition of e-Health that includes both ICT
and organisational change is needed. Once this is established, plans for
financing investment can follow. e-Health investment, in effect, must become an
integrated part of all healthcare investment.

It is correct to deny finance for e-Health if the planned
investment does not show a better net benefit than other types of competing
investment. The challenge for e-Health investors is choosing the best financing
arrangement; a common difficulty in integrating e-Health financing into the
factors that ensure success has been highlighted in this study. By
over-emphasising finance for ICT, engagement, change and the realisation of
benefits of these new initiatives are being hampered.

Single source financing for e-Health investment is inadequate as
more often than not, this financing does not see the project right through to
completion. The solution may lie in mixed financing arrangements that will help
manage investments at each stage of their life cycle. This is true of both
recurring and non-recurring costs. Joint financing for recurring costs is a
model in which all beneficiaries must be involved in the financing stage.
Current financing opportunities support a limited, and often insufficient,
investment lifecycle time-period. Therefore it is feasible to use a combination
of sources to support an investment with its characteristics determining the
finance mix. For such investments different models of e-Health financing need
to be combined.

The study has shown that public-private partnerships (PPP) can
help share the burden of financing e-Health investments between private ICT
vendors and public health service provider organisations (HPOs). At present,
most financing in Member States, the EU and on an international level is
non-recurring financing. Recurring finance, like the reimbursement for
healthcare with e-Health remains an exception. Evidently this has a negative
impact on e-Health investment. Moreover, recurring finance is not an attractive
option for many as financing long run recurring costs needs additional annual
income.

Another conclusion of the study is the need for the streamlining
and rationalisation of financing models for e-Health implementation. Many
financing sources have failed to recognise the need to expand the skills base
requisite to boost investment; this also must change.

Suggested improvements in these financing models include enhanced
facilities to navigate the diversity of financing sources, integrating the
policies and use of funds, and improving the co-ordination of EC funds. HPOs
should expand recurring financing through reimbursement with e-Health and
increase finance to develop new capacity for ICT-enabled change, e-Health
investment decisions, benefits realisation, health informatics, as well as
creating sustainable e-Health strategies that are part of general healthcare
development.

The report defines the issues determining the sustainability of
e-Health investments as:

Ó Economic and financial costs and benefits

Ó Timescales

Ó Risks

Ó General strategic fit

Ó e-Health procurement

Ó Reimbursement and business models

The report concludes that it is up to policy makers to boost
investment in e-Health. Policy makers need to manage the core, high-value
features of e-Health investment within the available resource mix and the
healthcare strategy. Suggested actions include:

Ó Promoting e-Health as a resource in healthcare and
services, not as an end in itself

Ó Focusing on improving several aspects of health
services, not on cash savings